Question 1

Briefly explain what is meant by the term "variable costs" and provide three examples of same.

Accepted Answer

Variable costs are a firm's costs that a

Question 2

In the US economy, nearly half of all the workers employed by private firms work at

Accepted Answer

A)  18,000 firms with fewer than 100 employees. 
B)  18,000 large firms that employ more than 500 workers. 
C)  26,000 firms with fewer than 100 employees. 
D)  26,000 large firms that employ more than 300 workers. 
A)  18,000 firms with fewer than 100 employees. 
B)  18,000 large firms that employ more than 500 workers. 
C)  26,000 firms with fewer than 100 employees. 
D)  26,000 large firms that employ more than 300 workers.

Question 3

Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs?

Accepted Answer

Fixed costs are expenditures that must b

Question 4

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

Accepted Answer

A)  Diminishing variable returns 
B)  Diminishing average returns 
C)  Diminishing marginal returns 
D)  Diminishing marginal costs 
A)  Diminishing variable returns 
B)  Diminishing average returns 
C)  Diminishing marginal returns 
D)  Diminishing marginal costs

Question 5

-The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph?

Accepted Answer

A)  by adding up the fixed costs 
B)  at any vertical axis point where the total cost curve never equals zero 
C)  as the point where the total cost curve touches the vertical axis 
D)  by adding up the variable costs 
A)  by adding up the fixed costs 
B)  at any vertical axis point where the total cost curve never equals zero 
C)  as the point where the total cost curve touches the vertical axis 
D)  by adding up the variable costs

Question 6

Briefly discuss marginal costs, including an explanation of how they are calculated; any condition that is typical to them, and what makes knowing them useful.

Accepted Answer

Marginal costs are calculated by taking

Question 7

The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________.

Accepted Answer

A)  downward-sloping; more costly to produce 
B)  upward-sloping; more costly to produce 
C)  downward-sloping; less costly to produce 
D)  upward-sloping; less costly to produce 
A)  downward-sloping; more costly to produce 
B)  upward-sloping; more costly to produce 
C)  downward-sloping; less costly to produce 
D)  upward-sloping; less costly to produce

Question 8

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

Accepted Answer

A)  diminishing marginal returns 
B)  marginal cost output 
C)  economies of scale 
D)  diseconomies of scale 
A)  diminishing marginal returns 
B)  marginal cost output 
C)  economies of scale 
D)  diseconomies of scale

Question 9

Which of the following should typically be ignored because spending has already been made and cannot be changed?

Accepted Answer

A)  variable costs 
B)  sunk costs 
C)  marginal costs 
D)  average marginal costs 
A)  variable costs 
B)  sunk costs 
C)  marginal costs 
D)  average marginal costs

Question 10

The _____________________ curve will always lie below the curve for average cost because average cost includes _____________ in the numerator of the calculation.

Accepted Answer

A)  marginal cost; total costs 
B)  marginal cost; fixed costs 
C)  average variable cost; fixed costs 
D)  average variable cost; total costs 
A)  marginal cost; total costs 
B)  marginal cost; fixed costs 
C)  average variable cost; fixed costs 
D)  average variable cost; total costs

Question 11

-Refer to the graph shown above. Based on the information illustrated in the graph, which of the following is correct?

Accepted Answer

A)  marginal cost line must intersect the average cost line at the middle point of the average cost curve 
B)  marginal cost of production is below the average cost for producing previous units 
C)  producing one more unit is reducing average costs overall 
D)  producing a marginal unit is increasing average costs overall 
A)  marginal cost line must intersect the average cost line at the middle point of the average cost curve 
B)  marginal cost of production is below the average cost for producing previous units 
C)  producing one more unit is reducing average costs overall 
D)  producing a marginal unit is increasing average costs overall

Question 12

Briefly describe the spectrum of competitive situations faced by firms in markets.

Accepted Answer

Firms face different competitive situati

Question 13

Briefly discuss average costs, including how they are calculated, how they are typically appear on a graph, and what they relate to profitability.

Accepted Answer

Average cost is calculated by taking tot

Question 14

According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will

Accepted Answer

A)  do so regardless of what type of competition exists in a market. 
B)  take a long-run perspective on costs, when such costs cannot be adjusted. 
C)  take a short-run perspective on labor costs which cannot be immediately changed. 
D)  breakdown its cost structure according to short-run adjustments. 
A)  do so regardless of what type of competition exists in a market. 
B)  take a long-run perspective on costs, when such costs cannot be adjusted. 
C)  take a short-run perspective on labor costs which cannot be immediately changed. 
D)  breakdown its cost structure according to short-run adjustments.

Question 15

The economies-of-scale curve is a long-run average cost curve, because

Accepted Answer

A)  it allows all factors of production to change. 
B)  fixed costs cannot be changed. 
C)  only variable costs are allowed to change. 
D)  only marginal costs are allowed to change 
A)  it allows all factors of production to change. 
B)  fixed costs cannot be changed. 
C)  only variable costs are allowed to change. 
D)  only marginal costs are allowed to change

Question 16

If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.

Accepted Answer

A)  decreasing returns to scale 
B)  consent returns to scale 
C)  economies of scale 
D)  increasing returns to scale 
A)  decreasing returns to scale 
B)  consent returns to scale 
C)  economies of scale 
D)  increasing returns to scale

Question 17

In microeconomics, the term _____________________ is synonymous with economies of scale.

Accepted Answer

A)  diminishing marginal returns 
B)  increasing returns to scale 
C)  decreasing returns to scale 
D)  constant returns to scale 
A)  diminishing marginal returns 
B)  increasing returns to scale 
C)  decreasing returns to scale 
D)  constant returns to scale

Question 18

Briefly describe the short-run perspective of a firm's total costs. Provide a brief explanation of what a production technology refers to and explain how production technology relates to a firm's long-run perspective.

Accepted Answer

In a short-run perspective, a firm’s tot

Question 19

If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals

Accepted Answer

A)  that if the market price exceeds average cost, profits will be positive. 
B)  that if the market price is below average cost, then profits will be negative. 
C)  total revenues are the quantity produced multiplied by the price. 
D)  whether the firm is earning profit if fixed costs are left out of the calculation. 
A)  that if the market price exceeds average cost, profits will be positive. 
B)  that if the market price is below average cost, then profits will be negative. 
C)  total revenues are the quantity produced multiplied by the price. 
D)  whether the firm is earning profit if fixed costs are left out of the calculation.

Question 20

A situation known as _____________________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production.

Accepted Answer

A)  returns to scale 
B)  economies of scale 
C)  constant returns to scale 
D)  diminishing marginal returns 
A)  returns to scale 
B)  economies of scale 
C)  constant returns to scale 
D)  diminishing marginal returns

Briefly explain what is meant by the term "variable costs" and provide three examples of same.

In the US economy, nearly half of all the workers employed by private firms work at

Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs?

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

-The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph?

Briefly discuss marginal costs, including an explanation of how they are calculated; any condition that is typical to them, and what makes knowing them useful.

The marginal cost curve is generally , because diminishing marginal returns implies that additional units are __________.

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

Which of the following should typically be ignored because spending has already been made and cannot be changed?

The _________ curve will always lie below the curve for average cost because average cost includes _ in the numerator of the calculation.

-Refer to the graph shown above. Based on the information illustrated in the graph, which of the following is correct?

Briefly describe the spectrum of competitive situations faced by firms in markets.

Briefly discuss average costs, including how they are calculated, how they are typically appear on a graph, and what they relate to profitability.

According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will

The economies-of-scale curve is a long-run average cost curve, because

If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.

In microeconomics, the term _____________________ is synonymous with economies of scale.

Briefly describe the short-run perspective of a firm's total costs. Provide a brief explanation of what a production technology refers to and explain how production technology relates to a firm's long-run perspective.

If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals

A situation known as _____________________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production.

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

Exam 7: Cost and Industry Structure

Briefly explain what is meant by the term "variable costs" and provide three examples of same.

In the US economy, nearly half of all the workers employed by private firms work at

Briefly explain what is meant by the term "fixed costs" and provide three examples of same. What determines a firm's level of fixed costs?

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

-The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph?

Briefly discuss marginal costs, including an explanation of how they are calculated; any condition that is typical to them, and what makes knowing them useful.

The marginal cost curve is generally ______________, because diminishing marginal returns implies that additional units are ________________________.

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

Which of the following should typically be ignored because spending has already been made and cannot be changed?

The _____________________ curve will always lie below the curve for average cost because average cost includes _____________ in the numerator of the calculation.

-Refer to the graph shown above. Based on the information illustrated in the graph, which of the following is correct?

Briefly describe the spectrum of competitive situations faced by firms in markets.

Briefly discuss average costs, including how they are calculated, how they are typically appear on a graph, and what they relate to profitability.

According to the definition of profit, if a profit-maximizing firm will always attempt to produce its desired level of output at the lowest possible cost, then it will

The economies-of-scale curve is a long-run average cost curve, because

If a firm is experiencing _____________________, then as the quantity of output rises, the average cost of production rises.

In microeconomics, the term _____________________ is synonymous with economies of scale.

Briefly describe the short-run perspective of a firm's total costs. Provide a brief explanation of what a production technology refers to and explain how production technology relates to a firm's long-run perspective.

If a comparison between average cost and price reveals whether a firm is earning profits, then a comparison between average variable cost and price reveals

A situation known as _____________________ occurs when all production inputs are allowed to expand, but that expansion does not result in much of a change in the average cost of production.

Welcome to Economics

Choice in a World of Scarcity

Demand and Supply

Labor and Financial Markets

Elasticity

Consumer Choices

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Monopoly and Antitrust Policy

Environmental Protection and Negative Externalities

Positive Externalities and Public Goods

Poverty and Economic Inequality

Issues in Labor Markets: Unions, Discrimination, Immigration

Information, Risk, and Insurance

Financial Markets

Public Economy

International Trade

Globalization and Protectionism

Filters

The marginal cost curve is generally , because diminishing marginal returns implies that additional units are __________.

The _________ curve will always lie below the curve for average cost because average cost includes _ in the numerator of the calculation.